Empowering States' Rights To Protect Consumers Act of 2026

S. 3721, titled the "Empowering States' Rights To Protect Consumers Act of 2026," was introduced in the Senate on January 29, 2026, and subsequently referred to the Committee on Banking, Housing, and Urban Affairs. The bill aims to amend the Truth in Lending Act to empower states to set maximum annual percentage rates (APRs) on consumer credit transactions, excluding residential mortgages. This legislative action is in its early stages, with no further committee actions recorded since its referral. The bill does not involve direct funding or appropriations. Instead, its mechanism is regulatory, by removing federal preemption that currently allows lenders to operate under the laws of their chartering state, regardless of the consumer's state of residence. By allowing states to set maximum APRs, the bill would directly impact the revenue models of financial institutions that offer consumer credit across state lines, as they would be subject to potentially lower rate caps in various states. Structural losers under this proposed legislation include major credit card issuers and consumer lenders such as Capital One ($COF), Citigroup ($C), JPMorgan Chase ($JPM), Bank of America ($BAC), and American Express ($AXP). These companies derive significant revenue from interest and fees on consumer credit, which would be constrained by state-level APR caps. The bill's passage would lead to decreased profitability and a potential contraction in consumer credit availability as lenders adjust to a more fragmented and potentially less lucrative regulatory environment. Over the past 30 days, the market performance of these institutions has been mixed. Capital One ($COF) is down 5.18%, and American Express ($AXP) is down 0.48%. In contrast, Citigroup ($C) is up 7.72%, JPMorgan Chase ($JPM) is up 0.65%, and Bank of America ($BAC) is up 0.50%. These short-term movements do not directly reflect the long-term potential impact of S. 3721, given its early legislative stage. The 7-day changes show positive movement across all listed tickers, suggesting the market is not currently pricing in significant risk from this specific bill. The legislative path for S. 3721 involves further consideration by the Senate Committee on Banking, Housing, and Urban Affairs. Should it advance, it would need to pass the full Senate, then the House of Representatives, and finally be signed into law by the President. Given its early stage and the significant opposition expected from the financial industry, the timeline for potential enactment is lengthy and uncertain.